Stockton’s City Manager, has laid out the city’s financial picture…and it isn’t pretty.

The City of Stockton is not declaring bankruptcy, but it is in a
serious financial crisis and City Manager, Bob Deis says previous
city councils are to blame. He says after previous accounting
gimmicks were recently discovered, Stockton's real deficit for
the year is at least $15 million dollars more than previously
believed. And, he says previous councils racked up at
least $760 million in unfunded liabilities and
debt.

DEIS: "There was no money set aside to fund those
commitments. While that was a legal decision they made over
20 years, it was an unsound decision and it has similarities to a
ponzi scheme."

Deis says things got so bad, the city started writing checks it
simply couldn't cash including $12 million in redevelopment
funds.

The city hired Deis in 2010. He says the current council
was instrumental in uncovering the hidden and deceptive
financial gimmicks approved by previous councils.

One of the drains on the city's finances is a healthcare program
for city employees. The plan pays every dollar of an employee's and
spouse's care for life…with the only requirement being the employee
serve one month on the job. Deis says that's emblematic of
the bigger problem.

DEIS: "In my 32 years of managing finances for various local
governments, I have never heard of a situation like this. I have
not seen a situation like this."

Deis expects the city council to vote Tuesday to ask a mediator
to help iron out the city's finances and come to a resolution with
creditors and unions.

The city will stop payment on three bonds. It will rely on
bond insurance to pay bond holders at least until June
30th.

Deis says the city will most likely not file any criminal
charges against previous employees who oversaw the city's finances,
but he says civil actions will be pursued.